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McKinsey Study Outlines Path to New, Green Economy

Current Technology Could Reduce Emissions 35 Percent Below 1990 Levels by 2030

WASHINGTON, DC, January 26, 2009 – On the day that President Obama is releasing his plan to create a new, green economy, McKinsey and Company has issued a ground-breaking report that outlines a path toward realizing the President’s goal by showing how current technology, if fully deployed, could dramatically reduce greenhouse gas emissions.  Many of the technologies identified in the report would provide savings to consumers and create thousands of new, green-collar jobs.

“This report provides further evidence that we can grow our economy and cut greenhouse gas emissions at the same time,” said Dr. Richard Moss, WWF vice president for climate change.  “If the policies were in place to force the broader deployment of the technologies highlighted in this report, thousands of new jobs would be created across the country. And these new job-generating technologies would put us on a path for dramatically reducing emissions and keeping global average temperatures from rising above the dangerous threshold of 2 degrees Celsius, or 3.5 degrees Fahrenheit.”

Pathways to a Low Carbon Economy, one of the largest and most detailed reports of its kind, lists more than 200 opportunities, spread across ten sectors and twenty-one geographical regions, that have the potential to cut global greenhouse gas emissions by 35 percent below 1990 levels by 2030, a reduction of 70 percent from the business as usual scenario. The study was supported by ten sponsors, including World Wildlife Fund (WWF) and energy, automotive and technology companies.

The report is a refined version of a previously-released Greenhouse Gas Emissions Abatement Cost Curve that compares the relative costs of using different technologies for reducing greenhouse gas emissions.  Many of the technologies highlighted in the report have negative cost – that is the savings they would generate would more than offset the cost of implementation, thereby providing savings to consumers. 

“The report demonstrates that we can save money for consumers if we enact some relatively straightforward policies and measures to overcome market barriers and failures that impede adoption of low-cost energy efficiency and alternative energy technologies,” said Moss. “By reducing energy consumption, we could also lower energy imports and increase our energy security.”

McKinsey concludes that the total cost of implementing all of the measures contained in the report would be less than one percent of global gross domestic product. However, the report does not include the economic costs that would result from escalating climate change impacts if emissions are not reduced. “This makes acting to use these technologies even more of a no-brainer,” said Moss. “If we fail to act, climate change will alter water resources, agriculture, and ecosystems, resulting in impacts on the economy and human health that could run to the billions of dollars annually in the United States alone. By reducing emissions, we will avoid some of the worst damages and leave the world’s natural heritage intact for future generations.” 

The McKinsey study has been extensively peer-reviewed by scientists, economists and expert bodies, including WWF. It presents its findings in the form of an “abatement cost curve” which graphically illustrates the sectors in which the most cost-effective carbon reductions can be made.


The McKinsey report, Pathways to a Low Carbon Economy, is available online: